Riverbank budget advisory committee orients members, elects chair and hears urgent warnings on reserves

Riverbank’s newly reconstituted Budget Advisory Committee met for an orientation session that included a Brown Act refresher, member introductions and election of leadership, and an extended discussion of the city’s near-term fiscal pressures.

Committee member Kimberly Linas was appointed chair by voice vote after accepting a nomination; Seabree Dillard was appointed vice chair. The appointments were approved by a voice vote of members present.

The meeting’s most consequential discussion focused on the city’s finances. In public comment, Diego Hernandez warned the committee that Riverbank’s general fund reserves and long-term obligations are at risk. “We’re headed to bankruptcy right now,” Hernandez said. “We’re literally headed to our bankruptcy,” and he urged the committee to review recent spending, planned projects and developer agreements closely.

City staff framed that concern with audited and projected numbers. Tammy, the staff presenter, told the committee the city’s projected general-fund structural deficit for fiscal year 26–27 is about $2.7 million and that current reserve levels are estimated at roughly 17% (the city’s target range is 13%–15%). Staff estimated that, if nothing changes, reserves could be drawn down in about 18–24 months.

Staff also described a council referral asking the committee to examine possible policies and triggers for using a Section 115 trust to manage CalPERS unfunded liabilities. Tammy said the trust balance is about $1.565 million and reviewed an illustrative scenario with an initial deposit of $1.5 million that could smooth employer contribution volatility — lowering a projected payment spike and producing a more stable annual CalPERS outflow in the example presented. Committee members asked staff for additional scenario analysis, clearer assumptions and comparisons with other cities before making a recommendation to council.

Members of the committee pressed staff on transparency and accounting practice. Several members asked how personnel costs are allocated among funds and asked for documentation of journal entries and percentage allocations; staff described a move to allocate employee wages in payroll (rather than year-end transfers) and said dual sign-off and backup documentation exist for transfers.

Tammy outlined other items the committee may consider in future meetings, including the council’s request to study options for reducing the structural deficit (revenue measures, fee studies, service-level priorities and one-time versus ongoing uses of reserves), the sales-tax sharing reimbursement tied to a commercial development (a reimbursable obligation with a total cap of $3.3 million and a projected remaining balance), and several deferred staffing requests that the committee will weigh for potential midyear consideration.

Council liaison Fosse urged members to be creative and “throw everything at the wall” to surface ideas staff might not see. Several members emphasized urgency: even if federal or external funding returns later, the committee should take short-term steps to avoid abrupt service reductions.

The committee asked staff to return with more detailed scenarios on the Section 115 trust (different deposit and return assumptions, downside scenarios) and with clearer documentation of interfund transfers and staffing-allocation methodologies. The committee scheduled an extra meeting for September 30 at 6:00 p.m. to continue substantive discussion ahead of the October quarterly meeting.

What happens next: staff will prepare scenario analyses and comparative examples for the committee; any formal recommendation to use the trust or to change reserve policy would go to City Council for final decision.